Two consecutive months of improved revenues recently ended for the five casinos in northwest Indiana, as they took in a total of .35 million in February 2015 compared to .25 million in February 2014, a drop of 1.3 percent.
Some may blame the weather—the coldest in many years in the Chicago area—but there was less snow than the year before. Ed Feigenbaum, editor of Indiana Gaming Insight, said, “Weather or no weather, you had gas prices going down and lower unemployment.” Feigenbaum added people seem to still be cautious, spending less money for discretionary options. He noted only Ameristar in East Chicago had a slight gain, from $18.27 million in February 2014 to $18.53 million last month.
Otherwise, Blue Chip Casino in Michigan City fell from $11.86 million in February 2014 to $11.51 million. Horseshoe Hammond was flat, with $36.06 million in February 2014 to $36.03 million. Majestic Star I in Gary declined from $8.03 million to $7.63 million, and Majestic Star II in Gary dropped from $6.03 million to $5.65 million.
Dan Nita, senior vice president and general manager of Horseshoe Hammond said the total amount of money spent on gambling in the last several years appears to be stable. But competitive challenges from neighboring states, particularly Illinois, continue to affect northwest Indiana casinos. “There’s continued pressure that won’t subside. The consistent dollar value is just chopped up in different ways,” Nita said.
He noted the emergence of about 18,000 video gaming terminals in Illinois bars, restaurants, truck stops and other locations generated $372 million in revenue last year has taken a toll on casinos in Indiana as well as Illinois. Nita said northern Illinois casino revenue dropped 5.1 percent last month versus February 2014, and in the overall Chicago area market, including Indiana, revenues dropped a total of 3.2 percent. And now, Nita said, Illinois truck stops want to increase the number of video gaming terminals they’re allowed to install from five to 10. “We have to convince the guests that are now playing at Illinois bars and taverns that we offer more,” he said.
Meanwhile Indiana casinos are trying different techniques to combat the competitive challenge. For example, Nita said, “We refresh the gaming floor every year” by offering “a balance between guests’ favorites and hot new games.” At Ameristar Casino in East Chicago, Vice President and General Manager Matt Schuffert said the casino has added 30 gaming tables and new poker room. David Strow, director of corporate communications for Blue Chip parent Boyd Gaming Corporation, said Blue Chip Casino has added a new gaming floor.
Northwest Indiana casinos also expect some help from state government, which has benefited from billions of dollars in casino tax revenue over the years. Proposed legislation would allow riverboat casinos to move ashore, remove the admissions tax and extend the $5 million annual free-play credit deduction. Those freebies are a strong marketing tool, but “some casinos spend that $5 million credit in a month or two,” Nita said. Other states, including Ohio, do not limit the promotional marketing expense deduction.
Feigenbaum said northwest Indiana casinos also are “right-sizing” their operations by closing a casino floor or restaurant during certain hours, adjusting the number of available tables and slots and adapting staffing. He added the casinos also are promoting what they can offer versus other entertainment options. For example, Nita said Horseshoe can “offer a great show, a beer fest, a poker tournament. Also very few restaurants capitalize on the view of Lake Michigan.” Strow said Blue Chip has been successfully promoting its Spa Blu hotel tower and restaurants. He added, besides increasing competition, “We’re also likely to see continued shifts in customer behavior, as non-gaming amenities and table games are quite popular among younger generations of casino visitors.”
